WITH room for maneuver slipping away, top US Republican John Boehner is in a bind over how to avoid going over the fiscal cliff: embrace higher taxes and earn conservatives' ire, or scupper a deal and incur Americans' wrath.

Another option, one that few non-partisans see as very viable, is for President Barack Obama to cave in and agree to Republican demands not to raise taxes, even for the wealthiest Americans.

A likelier resolution is a compromise with the White House that avoids the early January shock of automatic spending cuts coupled with tax hikes on nearly all Americans, while laying out enough deficit reduction that eases concern about the country's financial well-being.

In the game of political chicken to see whether Democrats or Republicans blink first, perhaps the trickiest role of all rests with Speaker of the House Boehner, who along with Obama is the principal in the negotiations.

Boehner's guidance of the Republican position in coming days and weeks could signal much about party direction in the wake of an election that saw flagbearer Mitt Romney - who advocated slashing tax rates across the board - defeated by Obama.

"To say Boehner is between a rock and a hard place is minimizing the problem he faces," Boston University professor and longtime political consultant Tobe Berkovitz told AFP.

"Boehner is trying to keep public opinion about Republicans from totally cratering, and at the same time keep the Tea Party hardcore conservatives from totally abandoning the party."

"And I think he's doing the best he can," the congressman told National Public Radio. "That doesn't mean that what he finally arrives at will be something that I can support or it won't. You know, I don't know."

Few people other than Boehner and Obama know the true state of negotiations in what appears as a well-choreographed campaign to thrash out a last-minute deal.

Discussions appear to have stalled, though, and Boehner has accused Obama of having "wasted another week" by not pushing talks forward.

This weekend Boehner "will be waiting for the White House to respond to our serious offer about averting the fiscal cliff," his spokesman Michael Steel told AFP.

Obama has proposed $1.6 trillion in new taxes over the next decade from higher rates on the wealthiest two percent of Americans.

Republicans countered with a plan for $800 billion in tax revenue raised by closing loopholes and ending some deductions. Both plans were rejected.

A Democratic official said Saturday that "nothing has changed since yesterday."

Polls show most Americans want to see taxes rise on the wealthy.

With Obama winning re-election on November 6, and his Democrats gaining seats in both the House and Senate, Republicans concede privately - and some publicly - that the Democrats have the upper hand.

"If he wants to have tax increases or tax rates go up, I don't see how Republicans can stop him."

Public trust is not in Boehner's favor. A Washington Post/Pew poll this week showed 53 percent of Americans would blame Republicans should the economy dive off the cliff; 27 percent would blame Democrats.

In his weekly address Saturday, Obama said he was willing to find ways to reduce health costs and make more entitlement spending cuts, but as for asking "the wealthiest Americans to pay higher tax rates -- that's one principle I won't compromise on."

Potential future Republican leaders like Senator Marco Rubio are unlikely to want to bend to White House will.

Rubio, a possible 2016 presidential candidate, gave the Republican response to Obama's address -- and said "tax increases will not solve our $16 trillion debt."

Boehner has said that, too, but his position is tenuous. On Friday he left open the possibility for compromise on a tax rate rise.

In past negotiations, such as last December's battle over extending the payroll tax holiday, some Republicans felt Boehner gave away too much.

Hashtags on Twitter - #boehnermustgo, #fireboehner - have recently left little doubt that some Republicans are fed up with his handling of the talks.

With conservatives demanding unity on taxes, Boehner faces the prospect of revolt from his right flank should he agree to a deal that would raise high-end rates.

Berkovitz said Republicans face two options if they want to avoid the cliff: negotiate and compromise, or hold their noses and "give Obama what he wants. If it goes south, take the election victory in two years and maybe four years."

News.com.au's Privacy Policy includes important information about our collection, use and disclosure of your personal information (including to provide you with targeted content and advertising based on your online activities). It explains that if you do not provide us with information we have requested from you, we may not be able to provide you with the goods and services you require. It also explains how you can access or seek correction of your personal information, how you can complain about a breach of the Australian Privacy Principles and how we will deal with a complaint of that nature.

Comments on this story

mature enough to know Posted at 4:08 PM December 09, 2012

There surely must some middle ground where both sides can meet. Here's some suggestions, how about closing ALL tax loopholes and insisting everyone pays their fair of tax, put a 15% GST in place on everything and a flat income tax rate of 20% regardless of income, if you earn an income in the US, you must pay your tax in the US. There should be no ability to minimise tax or send income offshore thus avoid paying tax. There should be no ability to transfer wealth between partners or family ie family trusts or income splitting and to top of it all off, if you employ someone, you can get a tax credit of some sort that allows your business to grow. Surely if some of these ideas were employed surely everyone would prosper.

Dennis Posted at 4:03 PM December 09, 2012

The USA has to increase taxes on the rich to get down the budget deficit.

A NOTE ABOUT RELEVANT ADVERTISING: We collect information about the content (including ads) you use across this site and use it to make both advertising and content more relevant to you on our network and other sites.